Got to agree with PortCity79! When I purchased my first iPhone, waiting like a dumbass until the iPhone was available with Verizon, I purchased the 32GB model iPhone 4. Then since I never used that 32 GB I got the 16GB iPad 2 and iPhone 5 and regretted it. I left Verizon and switched to T-Mobile and started using the Nexus 5 via Google with 32GB memory and used that for a year. I switched to the iPhone 6+ and got 128GB. So far I've used 31.5GB of the space, allowing me to keep all my audiobooks purchases local and with the WiFi calling I can get away with staying at T-Mobile.
Now if I was limited to space and had better local I would keep my music purchases in the cloud and as quality of T-Mobile's service improves I would say that it may be the case but I being a frugal memory person who has realized that his Mac usage can live within 128GB and the iPhone usage can suitably keep within the 64GB usage I would suspect that the increase to 128GB memory on the iPhone and having 64GB and then dropping to just 16GB was purely a financial reasoning and that it was really cheap for 16GB, as cheap for 64GB as 32GB and 128GB memory was cheaper than 64GB used to be and maybe if/when 256GB memory becomes so cheap that it is more cost effect to have 256GB has the top level memory the 16GB will become the new year-2 discount price and 64GB will be the base memory with an emphasis on using cloud and 128 will be the mid-tier model.
I think though that it's more about centralizing storage and pushing the use of cloud storage. Apple is really investing in having their own servers and if you look at Google and Android and Microsoft they are both focusing on centralizing data. Having one copy of music or video stored centrally is how they are heading. Think about it -- a single copy of a particular song stored centrally and streamed takes up the space of that single copy -- and of course if you look at AT&T and Verizon they are moving to offering bigger and bigger data allocations on contract and smaller carriers, in the USA at least, are focusing on more data or offset's such as free audio streaming, that facilitate the move towards more cloud based storage rather than local storage.
For me at least for the time being I still look at the local storage and opt for a higher capacity but that may change over the coming year or two.